Stockton officials hold no spark of interest for PG&E takeover

Wednesday

Jan 21, 2009 at 12:01 AM

STOCKTON - The City Council ended Tuesday what remained of former Mayor Ed Chavez's crippled bid to oust Pacific Gas and Electric Co. and to take over the local electricity market, dropping litigation in which last year's council sought to confirm its right - should it choose to exercise it - to sack PG&E.

David Siders

STOCKTON - The City Council ended Tuesday what remained of former Mayor Ed Chavez's crippled bid to oust Pacific Gas and Electric Co. and to take over the local electricity market, dropping litigation in which last year's council sought to confirm its right - should it choose to exercise it - to sack PG&E.

The freshman council voted 5-1 in its second closed session meeting of the year to reverse the council's November decision to appeal a judge's dismissal of the case. Mayor Ann Johnston and three newly elected council members all were critical in their campaigns of Chavez's takeover proposal, and the vote Tuesday was as expected.

"We have more pressing issues right now," said Councilman Elbert Holman Jr., referring in part to the city's $30 million financial crisis.

Councilwomen Susan Eggman and Leslie Baranco Martin, the only council members returning from last year, had supported the continued consideration of a takeover. Eggman cast the dissenting vote Tuesday; Martin was absent, in Washington, D.C., for the inauguration of President Barack Obama.

Eggman had said that to municipalize the utility could generate revenue for a city budget in deficit and afford City Hall the flexibility to offer rate breaks to businesses that might otherwise locate elsewhere.

A consultant, Seattle-based R.W. Beck Inc., said in a preliminary estimate that it could cost $368 million to buy out PG&E but that the city could recover that cost and save $8 million annually over 20 years. PG&E disputed that estimate, saying it grossly understated the cost of acquiring the company's assets.

"We've been of the same mind, that this is not good for customers, good for Stockton residents," she said.

Chavez first proposed a takeover in his final State of the City address in February. The city then sued PG&E, seeking to confirm its position that the utility was bound by a 1954 franchise agreement to sell its assets. The company, though offering no definitive answer to the city's claim a takeover was its right, warned one would be hostile and fraught with risk.

The company argued successfully in court that the litigation was premature, as the council had yet to decide whether to attempt an ouster.

Vice Mayor Kathy Miller said the council's vote would end takeover talks at City Hall, at least "for a while."

However, she said, "Abandoning the appeal doesn't change our ability to revisit the issue down the road."

Contact reporter David Siders at (209) 943-8580 or dsiders@recordnet.com.